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Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of Smith Dollar, PC, is licensed to practice law in California and maintains offices in Santa Rosa, California. Email Ms. Dollar
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2 Connecticut Real Estate Agents Charged with Engaging in Short Sale Mortgage Fraud Schemes
Sergio Natera, 35, Bridgeport, Connecticut, and Anna McElaney, 38, Norwalk, Connecticut, have been indicted and charged with one count of conspiracy to commit bank fraud and one count of bank fraud. Natera and McElaney are licensed real estate agents and the charges stem from an alleged "short sale" mortgage fraud scheme involving four properties located in Connecticut.
The indictment was returned on October 6, 2009. Natera and McElaney appeared before United States Magistrate Judge Holly B. Fitzsimmons in Bridgeport and each entered a plea of not guilty to the charges. Following the arraignment, each was released on a $50,000 bond secured by property.
A "short sale" transaction involves a mortgage holder or lender entering into an agreement to release its mortgage or lien on real property in exchange for payment of less than the total amount owed on the underlying debt. Many short sale transactions are legitimate.
The indictment alleges that in 2007 and 2008, Natera and McElaney conspired to defraud financial institutions of the full proceeds due to them on four separate real estate transactions in Bridgeport (2), Monroe and Wallingford, Connecticut. The indictment alleges that Natera and McElaney created straw buyer transactions in order to negotiate with mortgage holders to allow sales of the properties to occur without paying the mortgages in full. During the negotiations with the mortgage holders, Natera and McElaney knew that legitimate purchasers already had executed purchase and sale agreements with the property owners to purchase the property at higher prices. On each of the transactions, Natera and McElaney are alleged to have arranged for two closings to take place, the first from the property owner to the straw buyer at the short sale price, and the second from the straw buyer to the legitimate purchaser at a higher price. The indictment alleges that the mortgage lenders did not know about the second closing and received no proceeds from the second closing.
If convicted, Natera and McElaney each face a maximum term of imprisonment of 30 years and a fine of up to $1 million, on each count.
U.S. Attorney Nora R. Dannehy stressed that an indictment is only a charge and is not evidence of guilt. The defendants are entitled to a fair trial at which it is the Government's burden to prove guilt beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Ann M. Nevins.
In July 2009, the U.S. Attorney's Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. In addition to investigating past mortgage fraud schemes, the Task Force will focus on emerging crime trends that are associated with the growing tide of foreclosures, including foreclosure rescue schemes, and short sale schemes. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force, or by sending an email to .
The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney's Office; Federal Bureau of Investigation; Internal Revenue Service - Criminal Investigation Division; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General, and State of Connecticut Department of Banking.
Nora R. Dannehy, United States Attorney for the District of Connecticut, announced the two-count indictment.
Great article. I am approached several times a month to do these transactions, and it’s nice to see affirmation that these are a no-go. I hope they got the title/escrow officer, too.
Posted by on 10/21 at 08:01 AM
really have got to do it the right way! dont try to game the banks and disclose everything on the A-B transaction as well as the B-C transaction, an I hope that they do make an example of these for all of us who are doing these deals correctly so that we can continue doing them.
Posted by on 10/21 at 07:23 PM
I believe these folks are wrong in what they did but 30 years and up to 1 million is not right. They should pay the overage and court cost. People have to remember, the BANKS ARE NOT INNOCENT. We are in this mess because of them. The short sale is the best way for the banks to recover the majority of their lost by doing these loans in the first place. Sellers need the short sale to be able to get on with their lives and get a quicker start. Realtors need the short sale to have a property in the right price range to sell. We need to clear the mortgage mess up and the short sale is the best for all. Without the sale sales there is going to be more REO’s. The property values will really drop then because the banks who aren’t telling the truth now will continue to have an overload of properties. To get their money the prices will have to drop even more. I’m involved with REO Bulk Deals now and I see packages of properties going as low as $1,000 per door. These folks should be slapped on the hand, pay back the overage and court cost. THEY SHOULD ALSO HAVE TO TAKE A COURSE ON HOW TO PROPERLY DO A SHORT SALE. If the deals are done correctly the seller, lender, new buyer and real estate agent all win. If there is an investor they win too. For the past few years everyone was fine with these transaction. The banks SHOULD DO THEIR HOMEWORK and work with investors on these short sales and lets get this country back to where it should be. The SHORT SALE is needed to clear up this mess that the BANKS/LENDERS have created. Shame on them with this Lawsuit.It takes 3 to 6 months to do a short sale. THEY KNOW WHAT WAS HAPPENING. I could go on with more important reasons but there is not enough time. Thank you.
Failed Mortgage Firm Trustee Allowed $50,000 in Fees Union Leader
U.S. Bankruptcy Court Judge J. Michael Deasy will approve $50,000 in legal fees for the trustee of failed mortgage brokerage businesses Financial Resources Mortgage Inc. and CL&M Inc.
Bend Oregon Event to Help Homeowners Prevent Foreclosures Oregon.Gov
As part of an ongoing effort to help homeowners avoid foreclosure, state agencies are organizing a foreclosure-prevention event in Bend on Saturday, March 27, 2010.
Shelbyville Man Gets 2-Year Sentence For Loan Fraud Chattanoogan.Com
Prosecutor Gary Humble said the lost was approximately $2.3 million in the mortgage fraud involving hundreds of homes in the Shelbyville area.
Lend America, VP Ashley Banned from FHA Housing Wire
Michael Ashley, the embattled former vice president of Federal Housing Administration (FHA)-backed mortgage originator Lend America, and the company he worked for, were permanently banned from doing business in the industry last week.
Countrywide Tries to Pin Blame on Insurer Court House News
Countrywide Home Loans demands $111 million from Triad Guaranty Insurance, claiming Triad is trying to blame mortgage lenders for the insurer's role in the housing bubble and collapse.
Investors Say They Were Swindled in Property Scheme Fox 13 Now
Utah Division of Consumer Protection is joining forces with a few investors who claim they have been cheated by an agency called "Utah Mini Ranches.
Greenfield Man Accused of Housing Scam The Republic
A former real estate agent conned at least eight people by renting them properties actually owned by a federal agency and then running off with their deposits, prosecutors said.
Appraisal Institute Opposes Obama Administration's Plan for Homeowner 'Short Sales' PR News Wire
Citing concerns about increased mortgage fraud, four organizations representing more than 35,000 real estate appraisers today voiced their opposition to changes to an Obama administration program that will encourage "short sales" of homes.
Ownership Rights to Get Another Look TBO.Com
State lawmakers may beef up protections of property owners' rights by rewriting a law this spring that is at the center of a case of alleged fraud in Pasco County.
Thursday, February 18, 2010 F. Jeffrey Miller Trial Continued Testimony
As reported by Anne Mitchell, who viewed the trial:
Angela Parenza worked for Jeff Miller as the office manager for 7 or 8 years beginning in 1998. Parenza was indicted along with Miller and pled guilty to conspiracy to commit bank fraud and money laundering. Parenza testified that Miller or his contractors allegedly preferred to build all the...
Wednesday, February 10, 2010 F. Jeffrey Miller Trial Coverage Continued - Witness Testimony
Steve Middleton Testimony - Coverage Provided by Anne Mitchell
The Government continued in its cross examination of Steve Middleton. He was shown several HUD-1 statements involving sales of homes located in Overland Park, KS, and Olathe, KS. The HUD statements each allegedly showed line items of payments to (James) Moser & Associates, LLC's...
Monday, February 01, 2010 F. Jeffrey Miller Trial Coverage - Continued Witness Examination
According to Anne Mitchell, who is present in court for the trial:
Next Witness: Kelly Sanford
Kelly Sanford of the Federal Reserve was a short witness for the Government. Sanford manages electronic payments between banks and member financial institutions. He was shown copies of wire transfers and asked whether they coincided with the counts in...
Wednesday, January 27, 2010 F. Jeffrey Miller Trial - Prosecution Witnesses Continued
According to Anne Mitchell, who is viewing the trial:
January 13, 2010
Witness: Rick Hayes
Rick Hayes testified that on the day that he closed on his Miller Enterprise home, he received a phone call from the Kansas Banking Commission informing him that his loan was fraudulent. After the Hayes responded to a classified ad, they met with John...
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The information and notices contained on Mortgage Fraud Blog are intended to summarize recent developments in mortgage fraud cases and mortgage banking matters nationwide. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about mortgage banking, mortgage fraud matters or who believe they require legal counsel should seek the advice of an attorney. The creators, editors and sponsors of Mortgage Fraud Blog do not intend to create a confidential relationship or an attorney-client relationship by communication via or arising from this site.
Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
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